Washington: A U.S. tariff exemption for low-value imports is set to end this week as U.S. President Donald Trump signed an executive order last month to suspend the "de minimis" rule for shipments worth US$800 or less. Created in 1938, the de minimis provision is set to expire on Friday, posing a setback to e-commerce companies that have relied on the rule to send small parcels to U.S. customers duty-free.
According to Yonhap News Agency, packages will now be subject to tariff rates based on their country of origin. For the next six months, carriers handling shipments through the international postal network can opt to pay a flat duty of $80 for countries with a tariff rate of less than 16 percent, $160 for rates between 16 and 25 percent, and $200 for those with a rate above 25 percent.
In his July 30 executive order, Trump cited negative consequences of the de minimis rule, such as "risks of evasion, deception, and illicit-drug importation." He noted that many shippers go to great lengths to evade law enforcement and hide illicit substances in imports that go through international commerce. These shippers conceal the true contents of shipments sent to the United States through deceptive shipping practices.
Trump further explained that some techniques employed by these shippers include the use of re-shippers in the United States, false invoices, fraudulent postage, and deceptive packaging to conceal the true contents of the shipments, the identity of the distributors, and the country of origin of the imports.
In May, Trump already suspended the de minimis treatment for inexpensive packages from China and Hong Kong, which together account for the majority of such shipments to the U.S.